3.7 Connecticut sets a maximum fee that bail-bond businesses can charge for posting a given-size bond (Ayres and Waldfogel, 1994). The bail-bond fee is set at virtually the maximum amount allowed by law in cities with only one active firm (Plainville, 99%; Stamford, 99%; and Wallingford, 99%). The price is as high in cities with a duopoly (Ansonia, 99.6%; Meriden, 98%; and New London, 98%). In cities with three or more firms, however, the price falls well below the maximum permitted price. The fees are only 54% of the maximum in Norwalk (3 firms), 64% in New Haven (8 firms), and 78% in Bridgeport (10 firms).

Give possible explanations for this pattern.